The watchdog, set up to police the profession in the US after the disasters of Enron and WorldCom, is offering salaries in excess of $400,000 (£250,000) to its directors and top staff

But last week the Senate approved a Budget change, which barred any federal salary from being higher than the $400,000 paid to president George W. Bush, according to the Wall Street Journal.

Under salary proposals, the chairman of the PCAOB would be paid $560,000, while each board member would get $452,000.

If the matter is not resolved it could further hamper the recruitment process at the watchdog, which has yet to appoint a permanent chairman.

Last year William Webster was forced to step down as chairman only weeks after being appointed after questions were raised about his chairmanship of the audit committee of a company under investigation by the SEC.